Thursday, August 18, 2016

On Armstrong and Getty on August 17, 2016 | Exchange Premiums Up 20% in 2017 & Carriers Defecting

Obamacare enrollees are 22% more costly than people covered through employer plans.

But at least Medicaid expansion is cheap. Right? Nope. As recently as 2011, Medicaid covered adults cost $3,247 per individual while children cost only $2,463. However, a new report from the U.S. Department of Health and Human Services found Medicaid expansion enrollees are 50% more expensive than originally projected. New Medicaid expansion enrollees’ costs were $6,366 in 2015. Yes, federal bureaucrats missed their projection by 50% just a few short years in.

2) How much are the Obamacare premiums?

Employer based coverage is increasing, on average, between 6% and 8% depending on the state while Obamacare premiums are increasing, on average, between 18% and 23% depending on the state. This, despite the fact that politicians have waived a 3.5% tax for 2017. Obamacare added a Health Insurer’s Tax to be baked into all premiums, indefinitely, to partially pay for Obamacare. Politicians and bureaucrats got together last fall and agreed to waive its collection on 2017 policies in order to avoid further disruption of insurance premiums. Hence, next year’s renewals will automatically be a least 3.5% higher.

3) Anthem (Blue Cross), Aetna, Humana and United Healthcare All Now Running from Obamacare Exchanges.

Why? Because the risk transfer "profit sharing" mechanism expires and a major portion of this spigot will be shut off.

Some carriers, including Blue Cross have already sued the federal government because they want more subsidies that they were promised but now aren’t entitled to due to subsequent congressional clarification (the Marco Rubio move). PPACA provided all along that most of the bailout money would come in a form of budget neutral profit sharing arrangement from some of the carriers who experienced windfalls to those who lost badly.

Marco Rubio and a group of Senators spearheaded legislation that mandated no general fund support for the bailouts. And so now, some carriers are higher and drier than they thought they would be. But that will only be exacerbated after 2017 when there are no bailout dollars baked into the cake.

5) Surely then, individuals are doing better, right?

A) Narrow Networks & High Deductibles Fueling Surprise Medical Bills and Fights Between Insurers, Providers & Patients: The higher deductibles and more narrow networks necessitated by Obamacare plan design rules, are leaving patients with bills they can’t afford and hospitals with elevated levels of bad debt. “This issue is taking off like wildfire,” said Betsy Imholz, special projects director at Consumers Union, which has collected stories from some 2,300 patients of surprise bills ranging from $50 to thousands of dollars.

B) Bad Debt: Hospitals have long struggled to collect bills when patients aren’t covered by insurance - creating delinquent accounts. The Affordable Care Act was supposed to relieve some of that strain by helping pay for coverage for millions of Americans and expanding Medicaid in some states to cover the poor. Yet, an increase in insurance that comes with high deductibles and cost-sharing means hospitals are having a much harder time collecting.

Under individual Obamacare mid-level “silver” plans, the annual deductible was $2,556, and under less expensive, low-level “bronze” plans it was $5,328 in 2015.

Patients are unlikely to pay medical bills that are greater than 5 percent of household income, according to the Advisory Board, a consulting firm to hospitals. Median household income in the U.S. is at about $53,000, suggesting that when out-of-pocket charges exceed $2,600 hospitals can forget about collecting.

C) Subsidy Claw-back Nightmares: The Orange County Register highlighted the difficulties in the subsidy system. Telling the story of Kevin Foley who successfully enrolled in an Obamacare insurance plan with federal tax credits, made more money than expected and dealt with the government's byzantine clawback processes.